What is ULIP (Unit Linked Insurance Plan)In Unit Linked Insurance Plans(ULIP), the investments made are subject to risks associated with the capital markets. This investment risk in investment portfolio is borne by the policy holder. Thus, you should make your investment choice after considering your risk appetite and needs.

Introduction

What is ULIP?In Unit Linked Insurance Plans(ULIP), the investments made are subject to risks associated with the capital markets. This investment risk in investment portfolio is borne by the policy holder. Thus, you should make your investment choice after considering your risk appetite and needs.Another factor that you need to consider is your future need for funds. HDFC Standard Life offers you a variety of unit-linked insurance products to suit your goals - be it for your retirement planning, for your health, for your child's education and marriage or for investment purposes.

Which Investor Class Are They Most Suited For?

Those who wish to closely track their investments :Unit linked plans allow policy takers to closely monitor their portfolios. They also offer the flexibility to switch your capital between funds with varying risk-return profiles.

Individuals with a medium to long term investment horizon :ULIPs (Unit Linked Plans) are ideal for individuals who are ready to stay invested for relatively long periods of time.

Those with varying risk profiles : Across the seven funds offered, the equity component varies from zero to a maximum of 100 per cent. Thus there is a choice of funds available to all types of investors - from risk-averse investor to those investors who have strong risk appetite.

Investors across all life stages : This plan category offers a variety of plans which can be opted for depending upon the life stage you are in and your needs and financial liabilities at that point in time.

How Is It Structured? In a Unit Linked Plan (ULIP), the premiums you pay are invested in the funds chosen by you after deducting allocation charges and charges including those for managing funds, policy administration and for providing insurance cover are deducted from the funds by cancelling certain units.

The value of each unit of a fund is determined by dividing the total value of the fund's investments by the total number of units.

Advantages Of A Unit Linked Plan?

Market linked returns : Unit linked plans give you an opportunity to earn market-linked returns as part of the premiums are invested in market linked funds which invest in

different market instruments including debt instruments and equity in varying proportions.

Life protection, Investment and Savings : Unit linked plans offer the twin benefits of life insurance and savings at market-linked returns. Thus, you have the opportunity to invest your money to earn higher returns, while taking care of your protection needs. Investing in unit linked plans helps to inculcate a regular habit of saving and investing, which is important for building wealth over the long term.

Flexibility : Unit Linked Plans offer you a wide range of flexible options such as o The option to switch between investment funds to match your changing needs.o The facility to partially withdraw from your fund, subject to charges and

conditions.o Single premium additions to enable the policy holder to invest additional sums of

money (over and above the regular premium) as and when desired, subject to conditions.

Servicing A Unit Linked Plan

Single Premium : The policy holder is required to pay the entire premium amount as a lump sum at the beginning of the policy term.

Regular Premium Payment (annually, semi-annually or monthly ): The policy holder has to pay the pre-determined premium amount periodically i.e. annually, semi annually or monthly, depending upon the premium payment term opted for.

Number of Premium Paying Years : This depends on the term of the policy that you have chosen. In most cases, the policy term and the number of premium paying years (in case of regular premiums) are the same. However, some policies give the insured the option of choosing the number of premium paying years.

ChargesThe following charges are deducted from your policy towards the cost of benefits and administration services provided by HDFC Standard Life Insurance -

Administration charges : A fee is charged for administration of your policy every month. Administration charges are deducted by cancelling units proportionately from each of the funds you have chosen.

Fund management charges : These charges are towards meeting expenses related to managing the fund. This is charged as a percentage of the fund's value and is deducted before arriving at the net asset value of the fund.

Switch charges : You can switch between the funds available to suit your changing needs and goals. In a policy year, a fixed number of such switches are available free of cost. Subsequent to this, each switch would attract a certain charge. These charges are deducted by cancelling units proportionately from each of the funds you have chosen.

Surrender charges : These charges are levied for premature encashment of units. They are charged as a percentage of the fund value and depend on the policy year in which the policy has been surrendered.

Mortality Charges : Depending upon the age, and the amount of cover, these charges are levied towards providing a death cover to the insured.

Premium Allocation Charge : This charge is deducted as a fixed percentage of the premium received, and is usually charged at a higher rate in the initial years of a policy. This charge varies depending upon whether the policy is a single premium or regular premium policy, the size of the premium, premium frequency and payment mode.

Partial Withdrawal Charges : Lump sum withdrawals are allowed from the fund after the lapse of three years of the policy term and subject to pre- specified conditions. However, such withdrawals attract charges, as mentioned in the respective policy brochures.

Switching Between FundsHDFC Standard Life Insurance offers you the flexibility to switch between funds available under a unit linked plan.You may wish to switch between equity and debt funds, in times when there is market volatility or interest rate fluctuations. At times, changes in your financial standing, liabilities or risk profile may also require that you change your investments accordingly.

Making WithdrawalsYou may also make partial withdrawals from your funds after a certain specified period, subject to a partial withdrawal charge. The withdrawal amount should be at least the minimum prescribed withdrawal amount and the fund must not fall below the minimum fund value after the withdrawal.You can make a full withdrawal of your policy before its maturity date. However, surrender charges will be applicable in this case.

ULIPs from HDFC LifeHaving known the various advantages that ULIP offers, it is advisable to choose the right plan depending on your age group and the corresponding goals at various life stages.HDFC Life offers different ULIPs which are just right for you and can help you meet your specific financial objectives.

ULIPs for Children:o HDFC SL YoungStar Super Premium

ULIPs for Savings & Investment:o HDFC SL ProGrowth Super IIo HDFC SL ProGrowth Flexio HDFC Life ProGrowth Pluso HDFC Life Invest Wise Plano HDFC SL Crest

Group ULIPs:o Group Unit Linked Plan Gratuityo Group Unit Linked Plan Leave Encashment

Woman ULIPs:o HDFC Life Smart Woman Plan

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ULIP and Mutual Fund ComparisonComparison Between Unit Linked Insurance Plans And Mutual Funds.

Unit Linked Insurance Plans And Mutual Funds

Comparison Between Unit Linked Insurance Plans And Mutual Funds

DescriptionUnit Linked Insurance Plans refer to Unit Linked Insurance Plans offered by insurance companies. These plans allow investors to direct part of their premiums into different types of funds (equity, debt, money market, hybrid etc.).

A mutual fund pools the money from investors and uses it to invest in various securities according to a pre-specified investment objective.

ObjectiveUnit Linked Insurance Plans are long term plans offering you a dual benefit of insurance and investment.

Mutual funds are ideal investment tool for the short to medium term.

Tax BenefitAll Unit Linked Plans offer tax benefits under section 80C.

Only investments in tax saving funds are eligible for section 80C benefits.

Switching optionsUnit Linked Plans (ULIP) allows you to switch your investment between the funds linked to the plan. This enables you to change the risk return.

No switching option is available. If you are not satisfied with the performance of the fund you can exit completely from the same by paying exit charges, if applicable.

Additional BenefitsSome of the Unit Linked Plans give you an additional benefit or loyalty benefit by issuing extra fund units.

There are no additional benefits issued by mutual funds.

LiquidityUnit Linked Plans have limited liquidity. One needs to stay invested for a minimum period of time as specified in the policy before redeeming the units.

You can easily sell mutual fund units (except for ELSS and funds that have a minimum lock-in period).

Charges structureCharges in a unit linked plan include mortality charges for the life insurance provided. In addition, premium allocation charge, fund management charge and administration charges are applicable.

Mutual fund charges include an entry load, the annual fund management charge and an exit load, if applicable.

Benefit Snapshot

1. Dual benefit of investment and insurance.

2. Suitable for the long term. 3. Option to switch between the funds is

permitted. 4. Offers tax benefits.

1. Investment tool suitable for short to medium term.

2. Easy exit possible. 3. Tax benefit available only on tax

saving funds.

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Types of Life Insurance Policies

Insurance plans can be distinctly divided into ULIP (Unit Linked Insurance Plans) and traditional plans. Before making a decision whether to opt for a traditional insurance policy or a ULIP, an investor has to understand the principles and the way both these financial instruments operate.

Unit Linked Plans and Conventional Plans

Comparison between Unit Linked Plans and Conventional Plans

DescriptionUnit Linked Insurance Plans offered by insurance companies allow policy holders to direct part of their premiums into different types of funds (equity, debt, money market, hybrid etc.) Here the risk of investment is borne by the policyholder.

Conventional Plans are traditional insurance plans. They usually invest in low risk return options and offer guaranteed maturity proceeds along with declared bonuses.

Flexibility of investmentUnit Linked Insurance Plans give you flexibility to invest as per your risk profile, financial commitments and convenience. You can choose to invest either in equity, or in debt or in hybrid fund and even change your investment strategy.

These plans do not allow you to choose investment avenues. Your funds are invested as per the strategy and discretion of the company.

TransparencyMost Unit Linked Insurance Plans allow you to track your Your premiums are invested in

portfolio. They also regularly intimate regarding the percentage of the premium that is invested along with the charges levied. You are also kept informed about the value and number of fund units that you hold.

a common 'with profits' fund and therefore you cannot track your individual portfolio.

Maturity benefits payoutAt the time of maturity you redeem the units collected at the then prevailing unit prices. Some plans also offer you loyalty or additional units annually or at the time of maturity.

At the time of maturity you get the sum assured plus bonuses, if applicable in the plan.

Partial withdrawalUnit Linked Insurance Plans allow you to make withdrawals from your fund, provided the fund does not fall below the minimum fund value and subject to other conditions.

Conventional plans do not allow you to withdraw part of your fund. Instead, some policies offer you the facility to take a loan against your investment.

Switching optionsAvailable. You can change your investment fund decision by switching between the funds as being offered by the policy.

Not available since the investment decision is taken by the insurance company.

Charges structureUnit Linked Insurance Plans specify the charges. under various heads.

These plans do not specify the charges involved.

Single premium Top-upAvailable. The single premium top-up facility allows you to invest an extra amount over and above your regular premiums in your unit linked plan.

The top-up facility is not available.

Benefit Snapshot Unit Linked Insurance Plans give you

flexibility of investment,They allow you to track your portfolio.

Unit Linked Insurance Plans offer the benefit of a single premium top up which allows you to invest ad hoc additional amount.

Unit Linked Insurance Plans allow partial withdrawals, subject to conditions and switching between funds by paying some charges, if necessary.

Unit Linked Insurance Plans give you the

Conventional plans offer fixed premiums linked to the sum assured.

The maturity benefits for these plans include the sum assured plus bonuses, if applicable

option of a premium vacation.

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http://www.hdfclife.com/savings-investment-plans/progrowth-plus-ulip-plan

HDFC Life ProGrowth PlusHDFC Life ProGrowth Plus, a simple savings-cum-insurance plan that will enable you to enjoy life cover and benefit from comfort of creating your own investment strategies. This ULIP plan will help you to make the most of equities by channelizing your savings effectively.

Presenting, HDFC Life ProGrowth Plus, a unit-linked savings-cum-insurance plan (ULIP) that grows your savings by investing in the stock market without compromising on the life cover.

Features

Flexibility to choose from a range of funds:1. Income Fund2. Balanced Fund3. Blue Chip Fund4. Opportunities fund

Flexibility to choose sum assured

HDFC SL YoungStar Super Premium Children insurance plans help build savings so that over time there is enough to finance your child’s education, marriage, house or car. HDFC SL YoungStar Super Premium, a unit-linked insurance plan (ULIP) designed to accumulate savings for your child's future, even in your absence.

Every parent naturally wants the best for his or her child in every sphere, particularly education. Best-in-class education is no longer a luxury; it’s a must-have for anyone who wants to excel in his or her career. But that is easier said than done, given the escalating cost of education at premier institutes coupled with increasing competition. Fortunately for you, help is at hand.

Children insurance plans help build savings so that over time there is enough to finance your child’s education, marriage, house or car.

Features

Flexibility to choose from 4 funds to suit your risk appetite:1. Income Fund: Higher potential returns due to higher duration and credit

exposure.2. Balanced Fund: Dynamic equity exposure to enhance the returns while the debt

allocation reduces the volatility.3. Blue chip Fund: Investments in large cap equities.4. Opportunities Fund: Investments in mid-cap equities.

Flexibility to select premium amount – no ceiling on maximum premium Flexibility to select tenure of 10, 15 - 20 years Flexibility to select the Sum Assured

http://www.hdfclife.com/children-insurance-plans/youngstar-super-premium

HDFC SL ProGrowth Super IIHDFC SL ProGrowth Super II is a smart savings-cum-insurance unit linked plan that will help you to provide the finest for your family, be it today or tomorrow. This ULIP aims to help you achieve long term savings.

You will settle for nothing less than the best - be it for yourself or your loved ones. For that to happen, you need to build savings over the years with a little help from the markets, whenever possible. On your own this would be difficult, but fortunately for you there are investment plans that channelize your savings to help you achieve your financial goals.

Presenting HDFC SL ProGrowth Super II, a smart savings-cum-insurance unit-linked plan (ULIP) that helps you provide the finest for your family today and tomorrow.

 

Features

Flexibility to select term of 10 years or from 15 to 30 years. Flexibility to choose from a range of funds

1. Income Fund

2. Balanced Fund 3. Blue Chip Fund4. Opportunities fund

Flexibility to choose Sum Assured multiple Avail of hassle-free annual premium option

http://www.hdfclife.com/savings-investment-plans/pro-growth-super-2-ulip-plan

Advantages

The savings plan gives you flexibility to choose from the following 8 options:1. Life Option = Death Benefit2. Extra Life Option = Death Benefit + Accidental Death Benefit 3. Life & Health Option = Death Benefit + Critical Illness Benefit 4. Extra Life & Health Option = Death Benefit + Critical Illness Benefit +

Accidental Death Benefit5. Life & Disability Option = Death Benefit + Accidental Total & Permanent

Disability Benefit6. Extra Life & Disability Option = Death Benefit + Accidental Death Benefit +

Accidental Total & Permanent Disability Benefit7. Life & Health & Disability Option = Death Benefit + Critical Illness + Accidental

Total & Permanent Disability Benefit8. Extra Life & Health & Disability Option = Death Benefit + Accidental Death

Benefit+ Critical Illness + Accidental Total & Permanent Disability Benefit This plan provides valuable protection to your family in case you are not around. In case

of your unfortunate demise during the policy term, we will pay the Sum Assured and your total fund value to your family

Plan can be availed by filling short medical questionnaire, which may not require you to go for medicals

You can manage your investment funds either by switching funds from one fund to another or by redirecting future premiums into other funds

Tax benefits under section 80C and 10(10D) of Income Tax Act 1961 subject to provisions contained therein

Paying premiums is convenient with access to multiple modes – credit card, internet banking, cheque, auto debit facility

For more details on risk factors, terms and conditions, please read the Product Brochure carefully and/or consult Financial Consultant before taking a decision.

Eligibility

Life Options

Min-Max term age 10-30 years

Min-Max entry age 14-65 years

Maximum maturity age 75 years

Extra Life Options

Min-Max term age 10-30 years

Min-Max entry age 18-55 years

Maximum maturity age 70 years

Life & Extra Health Option

Min-Max term age 10-30 years

Min-Max entry age 18-55 years

Maximum maturity age 65 years

Extra Life & Health Option

Min-Max term age 10-30 years

Min-Max entry age 18-55 years

Maximum maturity age 65 years

Life & Disabilty Option

Min-Max term age 10-25 years

Min-Max entry age 18-55 years

Maximum maturity age 65 years

Extra Life & Disabilty Option

Min-Max term age 10-25 years

Min-Max entry age 18-55 years

Maximum maturity age 65 years

Life & Health & Disabilty Option

Min-Max term age 10-25 years

Min-Max entry age 18-55 years

Maximum maturity age 65 years

Age has to be taken as of "last birthday" basis

For more details on risk factors, terms and conditions, please read the Product Brochure carefully and/or consult Financial Consultant before taking a decision.

HDFC SL ProGrowth FlexiIt's prudent to be prepared all the time so that you can meet your life’s goals in a manner that secures your finances. HDFC SL ProGrowth Flexi, a savings-cum-insurance unit-linked plan (ULIP) that enables you to provide financial security to your loved ones.

Features

Flexibility to choose one of two benefit options:1. Life Option = Death Benefit2. Extra Life Option = Death Benefit + Accidental Death Benefit

Flexibility to Range of funds to choose from:1. Income Fund2. Balanced Fund3. Bluechip Fund4. Opportunities Fund

Flexibility to choose any sum assured multiple from 10 to 40 of the annual premium

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Advantages

The investment plan also provides invaluable protection to your family. In case of your unfortunate demise over the policy term, we will pay the greater of the Sum Assured or your total fund value to the nominee

On maturity, you can take the Fund Value at the prevailing unit prices as lump sum or you can opt for settlement option

Flexibility to move your accumulated funds from one fund option to another anytime or redirect future premiums into a different selection of funds

Tax benefits under sections 80C and 10(10D) of the Income Tax Act 1961 subject to provisions contained therein

Paying premiums is convenient with access to multiple modes – credit card, internet banking, cheque, auto debit facility

For more details on risk factors, terms and conditions, please read the Product Brochure carefully and/or consult Financial Consultant before taking a decision.

Eligibility

Life Options

Min-Max entry age 14-65 years

Maximum maturity age 75 years

Min-Max Policy term age 10-30 years

Extra Life Options

Min-Max entry age 18-55 years

Maximum maturity age 70 years

Min-Max Policy term age 10-30 years

Age has to be taken as of "last birthday" basis

Policy term of 11 years to 14 years is not offered.

For more details on risk factors, terms and conditions, please read the Product Brochure carefully and/or consult Financial Consultant before taking a decision.